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Part 2: Fighting Emergency Department Charge Leakage: A Day in the Life of Revenue Integrity

Disclaimer: This is part two in our three-part series on the emergency department revenue cycle. This information was drawn from the webinar Financial Best Practices for the Emergency Services Revenue Cycle. It was current at the time of its publishing and presentation via the web and is designed to provide accurate information in regard to the subject matter covered. It is not intended to take the place of either the written policies or regulations. We encourage you to review the specific regulations and other interpretive materials as necessary.

Based on a webinar by Bill Malm, an experienced member of our charge capture team and ED professional, we have created three resources to help guide your emergency department revenue cycle:

Let’s get started with part two.

Charge leakage, of any kind, is always detrimental to the financial health of a facility. Identification and management of leaks can present a great opportunity for remediation and ensure you earn every penny you deserve. The first step in turning problems into opportunities is to determine where the revenue leakage is occurring.

Common Causes of Charge Leakage

For most emergency departments, there are several common reasons for charge leakage:

  • Charges that are documented late (aka late charges)
  • Charges that are not documented completely
  • Documentation is present but no associated charge exists
  • Failed processes or procedures, such as incomplete education and auditing
  • System issues, such as EMR, mapping, or CDM
  • Human error

Most emergency departments will have leakage from a combination of all the above. The losses, and the opportunity for recovery, add up.

Net Income Opportunity

How much opportunity does this actually represent? HFMA (Healthcare Financial Management Association) and others have put lost charges at 1 - 5% of total charges. Like a leaky faucet, a few drips don’t seem like a big deal, but over time, the water wasted and water bill goes way up.

While Medicare may not reimburse separately, most facilities still have a percent-of-charge payor mix that should not be ignored. One example of this situation is

prosthetic and orthotic (“L” codes) for splints, air splints, and knee immobilizers, which are not separately reimbursed under OPPS. However, they may be reimbursable under another fee schedule. For percent-of-charge payors, making sure you have the charge on the claim will generate revenue. Another tip: don’t forget splinting and casting CPT codes (29,xxx) in these cases, as they’re often confused with prosthetics (“L HCPCS codes”).

The Safety Net of Pre-Bill Edits

A safety net for catching lost revenue may be available in the form of pre-bill edits. Depending on the system at the facility, there may be a mechanism to set up code edits prior to bill generation. Epic has Revenue Guardian™, which requires the facility to generate and maintain their own rules. There are also proprietary systems (such as our VitalIntegrity solution) that have the advantage of being maintained by a vendor team of experts. Proprietary systems use hundreds of thousands of rules to check code combinations on a claim. Some systems have more advanced rule logic with “one to many” relationship edit ability, versus just one to one. Whether you have a team keeping rules up to date, or a system that does it, it’s important there’s focus on it to fight charge leakage.

Pre-bill review and analysis of charges are used to help identify:

  • Lost charges
  • Overcharges / excessive units
  • Units of service below or exceeding threshold of an MUE
  • Inaccurate supply/procedure combinations
  • Medications charged with units less than clinically expected
  • Duplicate charges

One might think, “Oh, the Billing department will take care of those things.” But it’s worth noting that Billing can’t correct charges that aren’t there in the first place. The goal of the pre-bill charge review is to ensure all charges are present for the documented service, with the correct quantities, and therefore “clean” BEFORE moving into the billing cycle.

Case Routing for Accurate Review

For ED charges, service line expertise generally drives the review. Our experience has shown that a cardiology coder, for example, likely doesn’t have an in-depth familiarity with what goes on in the ED. Because of this, we have seen revenue cycle teams bring in paramedics to do ED itemized charge review. This scenario is known as case routing. Work-queues designed with case-routing mechanisms take a specific characteristic (payor, service line, charges dollar-amount) and route “like and kind” to a specific queue or professional.

In other words, make sure to get the right work, to the right people as quickly as possible. Case routing should be dynamic, with the ability to change based on a given situation, such as PTO, holiday coverage, and staffing changes. If someone goes on maternity leave, the work-queue should easily be re-routed to a different analyst.

The emergency department charge specialist will use “rules” or combinations of edits to analyze four components:

  1. Evaluation & management (E/M)
  2. Surgical & medical procedures
  3. Supplies
  4. Pharmaceuticals

Reviews are completed using a rule to identify “potential” charge abnormalities. The analysts aim to discover missing charges, charges that “do not make sense” together, and duplicate or inconsistent charges.

A Day in the Life

First, let’s quickly discuss who a charge capture professional is. Simply put, these professionals are responsible for isolating and correcting missing, inaccurate, and overcharges. The team will typically work with a facility system, and/or employ an additional, proprietary system (such as VitalIntegrity). The good third-party solutions consume 100% of all charges for the ED and other departments, runs them through countless edits, and rapidly identifies charges that are inconsistent, missing, or duplicative, allowing the reviewer to remediate the charge before sending them on for billing.

So which team are charge capture professionals part of?

Most of the time, charge capture professionals are part of the Revenue Integrity, Coding, and/or Patient Financial Services (PFS) team. Each professional biller typically has expertise in one area of specialty, such as the ED. They should have coding experience (not necessarily certified), or at least access to a coding professional for more complex coding concerns.

Working Through a Work-Queue

Daily, the charge capture professional will get either an itemized pre-bill or post-bill work-queue. These work-queues are designed to evaluate charges based on the analyst’s skillset. Queues may be based on government vs. non-government payors, high dollar claims, or based on service line (e.g. ED, surgery, radiology, lab, etc.).

What does a charge capture professional typically see when working through a work-queue? Here are a few examples of typical errors or “signals” that come up and require review:

  • Level 5 E/M without any additional charges like radiology, lab, or procedures
  • Laceration tray supply charge without laceration repair
  • Trauma 05 in FL 14 without 068x revenue code charge
  • Multiple E/M on the same day of service
  • IV / IM / SQ drug without administration charge
  • Toxoid administration without toxin
  • Endotracheal tube without intubation charge
  • Zofran billing units = 10,000

Related to the last bullet above, we’ve seen computer decimal errors occur over the weekend, switching thousands to millions. Charge capture analysts are the ones that come to the rescue on a tough Monday morning.

There are literally thousands, if not millions, of different combinations to analyze. After charges are flagged by the software, then a chart review is completed. The professional will review those identified charges against the medical record. If it’s accurate, no action is taken. If it’s inaccurate, the original charge is credited and replaced with the correct one. And if it’s a duplicate charge, a credit is issued. Once all charges are finalized, they move into the billing cycle for a final scrub.

Post-Bill Review

This process is very similar to the pre-bill charge review. However, the data elements are completely distinct. In pre-bill, itemized charges are used, but in post-bill the 837I is the data source. There are a couple of points in the process where you can obtain an 837. One is from the billing system itself and the second is post-claim review by a scrubber or clearinghouse. The earlier in the process, the more time to remediate a concern prior to submitting the 837 to the payor.

The 837I is created post-scrub and sent to the payor. 837I from the scrubber can isolate charge capture issues that slipped through the scrubber and likely require amendment to the “pre-bill” edits so that it’s fixed at the root cause.

To recap, we have noted that the Emergency Department revenue cycle is a significant source of charge leakage that must be mitigated via a specialized charge capture team. And to that end, software that can identify abnormalities is the best defense against charge leakage.

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